How to identify Benefits with Actualized and/or Projected Reporting Types

Check out this video that goes into detail about these concepts.

The three use cases in this video are detailed again at the bottom of this article. Please comment at the bottom if you have any questions.

Most purchasing agreements have the potential to provide immediate benefits to the university, but there is more to a Benefit than just price per unit. To fully and accurately report on the great work you are doing, make use of the Actualized and Projected Reporting Types in Benefit Bank.

Benefit Activities

In cases where the Benefit contains more than simple cost reduction, additional Activities are layered on top of the Benefit to accurately define the total Benefit amount.

A single Benefit can have multiple Activities.

	Definition	Common Use
Activity	An entry containing specific details about a Benefit	Adding additional achievements to previously entered Benefits Precise details for sourcing events

Activity Types

Each Activity Type contains information about the type of Benefit.

Activity Types

Definition

Transactional

A Benefit:

known, not estimated, at agreement signing
achieved from a one-time purchase of goods and/or services

Sourcing

A Benefit:

generated from a multi-year agreement
establishes a framework for recurring transactions
achieves benefit(s) throughout the life of the agreement

Missed

A Benefit that could have been generated but was missed due to circumstances outside the control of Procurement

Reporting Types

Each Activity type has two reporting type options. An Activity can have either or both reporting types.

Reporting Type	Definition	Common Use
Actualized	A Benefit with a defined quantity and absolute/firmly known value	Usually a transactional or a professional services/fixed-fee engagement. See Renegotiating an existing contract (One-off Large Volume Purchases)
Projected	A Benefit that has an estimated value based on past behavior and known future conditions, usually resulting from sourcing event	Usually a sourcing event. See Extending an Agreement (Computer Hardware Purchase)
Both	A Benefit with both a firmly known value for the current fiscal year and estimated value for future years	Usually a sourcing event. See Co-branded Credit Card Agreement

Use Case Examples

Extending an Agreement (Computer Hardware Purchase)

Three years ago
The university signed an agreement with Good Computers to purchase laptops and tablets.

Today
UC decides to extend the agreement for one more year. The procurement team revisits the volume assumptions from the original contract signing and discovers that, in the last twelve months, tablet orders are higher than originally projected and laptops orders are lower. The team decides on a new volume assumption for the agreement extension term.

How should the one-year extension be added to Benefit Bank?

This is a multi-year sourcing agreement where we know the cost but do not know the volume. This benefit does not have an absolute value, it is an estimate based on projected volume.

Activity: Sourcing  |  Reporting Type: Projected

Now that we know the Benefit types, follow these instructions to add a new Activity to an Existing Benefit

Renegotiating an Existing Contract (One-off Large Volume Purchases)

Today
UCD has an existing contract with Accurate Labs to provide the chemicals for their laboratories. Pricing was based on historical amounts purchased. One of the researchers at UCD needs a one-time buy of 100x the normal amount of one specific chemical. The purchasing agent negotiated a lower cost for this specific chemical, due to the size of the one-time special order.

How should this be added to Benefit Bank?

This Benefit should be reported as Actualized because we can determine the exact amount, and the Benefits achieved are immediate.

Activity: Transactional  |  Reporting Type: Actualized

Now that we know the Reporting type, complete the standard Benefit entry process. If you need a refresher on entering Benefits, check out the User Quick Start Guide.

Co-branded Credit Card Agreement

Today
The university enters into a ten-year credit card services agreement with Big Bank and receives a $1M signing bonus every year, starting this year, and continuing for nine more years. Additionally, the university receives a 1% cash-back bonus on all card purchases.

How should this be added to Benefit Bank?

We do not know how many credit card transactions will occur over the life of the agreement, so we must make a reasonable estimate of the cash-back bonus amount, based on historical volume.
We know an exact amount of the Benefit: $10M paid out over 10 years.

This Benefit is both Projected and Actualized because we know the exact amount of the signing bonus but we do not know the exact amount of the cash-back bonus.

Activity: Sourcing  |  Reporting Type: Projected and Actualized

In Benefit Bank, the Reporting Type should have both the Actualized and Projected boxes checked.

In this example, Benefit bank will automatically create two layers for you.

One Activity layer for the Projected amount
One Activity layer for the Actualized amount

Benefit Bank will prompt you to provide documentation for the Projected Benefit as it creates the Projected Activity. Then it will prompt you for the documentation for the Actualized Benefit as it layers in the Actualized Activity.

Now that we know the Reporting types and how to properly mark the Reporting type, complete the standard Benefit entry process. If you need a refresher on entering Benefits, check out the User Quick Start Guide.

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